The State Government is considering a review of mining-related costs to local authorities.
The move comes as concern mounts in the State’s mining and exploration industry over increasing shire rates for mining tenements.
In a joint statement to WA Business News, State Development Minister Clive Brown, and Local Government Minister Ljiljanna Ravlich, said there needed to be an “informed” examination to determine the cost to local authorities of dealing with mining-related matters in their area.
They also said the degree to which such costs warranted an increase in rates that applied to mining operations needed to be examined, although no such examination was under way or planned.
Mining and exploration industry lobby group, Association of Mining and Exploration Companies, this week called for an independent appeal process to arbitrate between local governments and tenement holders, following what it claimed were “massive increases” in shire rates.
AMEC chief executive Justin Walawski said in some cases increases to 2004-2005 shire rates for the mining sector were 500 per cent higher than increases to residential rates.
“There is no equity in these decisions, no justification for differential treatment of the industry, and the magnitude of the increases seriously threatens the economic viability of mineral exploration and mining companies,” he said.
Mr Walawski said an independent appeals process involving arbiters who had some understanding of the mineral exploration industry was required.
“Councils have little understanding about the mining industry . . . the exploration phase does not produce revenue with which to meet rates,” Mr Walawski told WA Business News.
In August the Shire of Coolgardie increased its shire rates for mining tenements by 22 per cent and residential rates by 5 per cent. It also imposed a waste management disposal fee of $60 on each tenement.
While acknowledging a concern over the increase in rates in the mining industry in general, the Chamber of Minerals and Energy said it would have to see AMEC’s proposal before offering support.
CME director of external affairs David Parker said AMEC’s call was probably fair for explorers but mining companies, which comprise the majority of the chamber’s membership, had varying opinions on the means by which they support local communities.
Mining tenement consultant Kevin Connell said his clients included large miners concerned about the increases.
Increases also had the potential to impact the bottom line of big miners, he said.
“When management in London or South Africa runs the ruler over their operations and find that WA is too expensive to explore in … exploration is the first to get the chop,” Mr Connell said.
The Western Australian Local Government Association has rejected calls for an independent arbitration process, saying a valuation appeal process already existed through the Land Valuation Tribunal.
“The association does not want to see the erosion of the autonomy of local government to raise rates,” WALGA president Bill Mitchell said.
Shire of Coolgardie CEO Mal Osborne said the shire increased its rates from 11.4 cents in the dollar to 14 cents in dollar after receiving a report indicating it was one of lowest raters of mining tenements in the State.
“Some local councils are charging up to 21 cents in the dollar,” Mr Osborne said.
Coolgardie, however, has one of the higher minimum rates, at $310 for mining tenements.
But Mr Osborne said council decided to increase the rates because of the view it could be penalised in the funding it receives from the Federally-funded WA Local Government Grants Commission.
